Atheists Again Get Pastors’ Best Benefit Ruled Unconstitutional

Freedom From Religion Foundation wins first round of rematch over $800 million clergy housing allowance.

Once again, a federal judge has declared that the longstanding clergy housing allowance violates the establishment clause of the First Amendment.

Offered only to “ministers of the gospel,” the 60-year-old tax break excludes the rental value of a home from the taxable income of US clergy. It’s the “most important tax benefit available to ministers,” according to GuideStone Financial Resources.

It’s also the biggest: American ministers currently avail themselves of the tax break to the tune of $800 million a year, according to the latest estimate by the congressional Joint Committee on Taxation.

Wisconsin district judge Barbara Crabb first ruled against the housing allowance in 2013, finding that the second part of Section 107 of the IRS tax code provides “a benefit to religious persons and no one else, even though doing so is not necessary to alleviate a special burden on religious exercise.” Her ruling “sen[t] shockwaves through the religious community,” the Evangelical Council for Financial Accountability stated at the time.

But an appeals court overturned her decision in 2014, ruling that the atheist plaintiffs from the Freedom From Religion Foundation (FFRF) was not sufficiently harmed by the tax break to challenge it in court.

The most “fascinating turn” in the legal fight was when the Department of Justice defended the housing allowance by arguing that atheist leaders qualify as “ministers of the gospel” and could claim the exemption for themselves.

However, the IRS disagreed. The FFRF changed how it compensates its leaders to match the housing allowances that churches give pastors, and sued again when its co-presidents were denied the tax …